Will We Witness the Bitcoin Bull Market Any Soon? Probably Not.
By Stephan Cummings on ALTCOIN MAGAZINE
Bitcoin enthusiasts were waiting for the bull market for the entire 2018. The words about the coming soon recover of the price were repeated daily — at the very same time when skeptics were talking about the soonest “death” of Bitcoin. The reality appeared to be less edgy: I’d rather said that the price of Bitcoin was gradually sliding down (I’m not going to describe the trajectory accurately, essentially the year started at around $13,800 and ended at around $3,800). The start of Bakkt operation was rescheduled again. The Lightning Network that is supposed to solve the problem of the Bitcoin network’s low speed was not implemented. It seems that nothing serious has happened in the world of Bitcoin in 2018. Anyway the project is still here, it still attracts users, developers, and investors, and the price is not pretending to go up. There are some reasons to believe that it won’t happen in 2019, too.
1. $20,000 per Bitcoin. What was that?
Let’s agree that it wasn’t something normal. Bitcoin has its valuable characteristics that made this cryptocurrency popular in the first years: people were paying with Bitcoin for the purchases on the Internet. It was comfortable. Together with the growth of the mining expenses, the relative popularity of Bitcoin the price was going up. The trade was another factor. The mining expenses are still far from $20,000 (in China the mining of a single Bitcoin costs roughly $3k).
So this ridiculously high price of Bitcoin doesn’t correlate with the mining expenses, nor with the technological breakout (there were no revolutionary implementations in the Bitcoin network at the end of 2017). So, some people say it was all about the hype.
Let’s check if it’s the case. The overhype really took place those days. The media were presenting Bitcoin as a way to get easy money in the short term — and for a good reason — the price was rising higher and higher these days. Sooner or later many people were buying this news and changed their cash for Bitcoin. Some of these people got lucky, some not, but I can’t see one more principal link in this chain: why do media start the hype? The hype actually was a result of huge efforts to pump the price up. The people form Tether are suspected in manipulating the Bitcoin price. Now they have to deal with the investigation lead by DOJ. Trading is one of the channels used by the Bitcoin whales to affect the Bitcoin price in order to make a profit. The peak price of Bitcoin wasn’t natural at all. And when people are asking if the price ever go back to $20,000 I think “why it even should happen?”
2. What do experts say about 2019?
In the last couple of days, the BTC price avoided the predicted drop under $3,600 and the total market cap of cryptocurrencies hit $123 billion. Ethereum is also coming up after the recent hard-fork-related drop. Is it a good reason for optimism? I think no because in 2018 we have witnessed a lot of positive trends that didn’t manage to turn into a real bull market (of course, that’s not the only reason).
Experts say that 2019 will be the year of a slow decrease of the Bitcoin price. Thankfully they explain the reasons! For example, the technical analyst Eric Thies believes that the current long-term trend for Bitcoin is similar to 2015 and the price will go up only at the end of 2019. He calls 2019 a year of accumulation and admits that the fluctuations in the low price range are possible (he names the range between $2,000 and $4,000).
On the other hand, a self-proclaimed crypto researcher Willy Woo provides the following statement:
Despite the technical setup that suggests bullishness is possible, there’s not a lot on-chain volume to fuel a prolonged up move. What we saw in the last 7 weeks was a spike of on-chain volume driven by volatility, coins moving to exchanges to trade. The initial volume spike false signaled a faster detox and an earlier end to the bear market, but in fact, it was a volatility side effect. That move from $6k to $3k created immense trade volume, but it was in no way a signal that accumulation volume had begun.
It means that accumulation won’t start in the following months and the price will probably drop below $3,600. What it doesn’t mean is that the rise of the BTC price is not going to happen later.
Small tokens will face a hard time this year. Arthur Hayes of BitMEX assumes that if the correction of the Bitcoin price happens before the bottom establishing the currencies with the low market cap and illiquid assets will experience the constant price drop and will lose a lot against Bitcoin and USD.
3. Am I saying anything bad about Bitcoin?
Oh no! What I’m saying is just… yep, probably Bitcoin is not going to be as expensive as it was when the rich scammers were spending millions of dollars to make even more money. I think that Bitcoin should have a reasonable price (or at least a reasonable price range). It doesn’t matter how much exactly but let me assume that this rate should correlate with the mining expenses and let miners earn something. We should value the opportunities given by Bitcoin more than its exchange rate.
In his Twitter, Woo is advocating for Bitcoin as for the store of value but keeps being skeptical about the Bitcoin’s ability to be utilized. The experimentation with cryptocurrencies are not going to finish in 2019, so we will see if this technology fulfills its potential to become a mainstream payment mean. The regulations will follow, the improvements of the technology will follow, the new investments will follow, and the support from common people will follow, too. I think many people are scared now because the media were portraying Bitcoin in the wrong manner. It was presented as an efficient and simple speculative asset. Now they write about the death of Bitcoin. When the truth will become more obvious than this ignorant perspective, people will start using Bitcoin, and it doesn’t matter if the price will be $3,600 or $20,000.
P.S. The dot-com bubble had burst at some point, but it wasn’t the end of the Internet and online business — quite opposite. Probably the same scenario can happen to cryptocurrencies. The time will show.
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